New York — Former Allstate Corp. CEO Edward Liddy was hired by the U.S. government to run American International Group Inc. (AIG) as part of a plan to avert a collapse of the country's largest insurer.
Liddy helped oversee the spinoffs of Allstate, Discover Financial Services, real estate broker Coldwell Banker Corp. and securities brokerage Dean Witter when he was an executive at Sears Roebuck & Co. He replaces Robert Willumstad, who's leaving after the government took control of New York-based AIG.
At AIG, Liddy, who ran Allstate from 1999 until 2006, will need to stem record losses tied to mortgages, and preside over the sale of units to raise cash to repay a federal loan of as much as $85 billion. AIG plummeted 97% this year in New York Stock Exchange trading, erasing more than $125 billion of market value.
Liddy, a partner at private-equity firm Clayton Dubilier & Rice Inc., is "a platinum-level insurance executive and the ideal appointment for a company that needs to evaluate the value of its core insurance operations," says New York Insurance Superintendent Eric Dinallo. "He has great financial services expertise."
Treasury Secretary Henry Paulson made the decision to oust Willumstad, who became AIG's CEO in June, and informed him of the news yesterday. Liddy was elected as a director of Goldman Sachs Group Inc. in 2003, when Paulson was CEO of the New York-based investment bank.
Source: Insurance Headlines Newsletter
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